Fuelling the talent pipeline: Energising the oil and gas sector

Despite volatile commodity prices, recent recession and social unrest, the oil and gas sector is booming worldwide. Global mobility and HR specialists are playing a key role in supporting energy companies to overcome the challenges inherent in both new frontiers and familiar destinations. Ruth Holmes reports.

In a sometimes-uncertain world, one of the only near- certainties is the global appetite for energy. According to the US Energy Information Administration’s International Energy Outlook 2013, world energy consumption is set to grow by 56 per cent between 2010 and 2040, fuelled by global population growth and increased economic activity from emerging economies, most notably China and India.
Ever-growing energy demands are creating opportunities for mobile workers and their employers in both new and traditional destinations. Longer-established oil and gas provinces like the UK Continental Shelf (UKCS), which centres primarily on British waters in the North Sea, are receiving large investments to maintain and enhance the efficiency of installations. This year, UKCS is to benefit from a record £13.5 billion investment, according to trade body Oil & Gas UK.
Further afield, in the Middle East, the Hays 2013 Global Oil and Gas Salary Guide observes “a flurry of hiring as a range of mega-projects kick off” in Iraq.
Extraction of ‘non-conventional’ power sources like shale gas and oil are also developing fast, and in new centres. While the likes of Houston, Aberdeen and Perth are still important, says the guide, the destination board for mobile oil workers in both onshore and offshore roles is rapidly expanding.
South Africa, Ghana, Liberia, Sierra Leone, the Russian Arctic circle and Greenland feature among the newer oil and gas-producing regions with technically recoverable shale gas and oil, or that are opening new fields.
Together, these locations are all providing fresh challenges for HR and global mobility teams as they work to support corporate strategy and provide the highly skilled technical talent required to service rising energy needs responsibly and cost-effectively.
 New horizons?
These major developments globally are having a keen impact on the oil and gas talent pipeline. In the UK alone, data from Oil & Gas UK’s 2013 UK Offshore Continental Shelf Workforce Demographics Report shows a significant increase in workers travelling offshore in 2012 compared to previous years, with 56,982 people posted offshore. This is “the highest number since 2006, when data were first analysed, and nearly a 9 per cent increase from 2011, when 52,300 employees travelled offshore”.
Commenting, Dr Alix Thom, employment and skills issues manager at Oil & Gas UK, said, “The UK oil and gas industry is growing steadily, with record investment in new developments forecast this year, mounting interest in exploring for new reserves, and fields expected to produce into the 2040s. The volume of anticipated activity shows that the UK oil and gas sector is an exciting and promising place to build a career.”
Around 10,000 of the UK’s offshore workers come from overseas, principally Norway, the Netherlands, the US, Poland,
Ireland and Denmark, although most nations are represented. UK nationals also comprise a significant, and rising, proportion of personnel on the UKCS, numbering 47,192 in 2012 – up 8.8 per cent from 2006, according to the report.
“The skills, expertise and technology developed on the UKCS are highly sought after by other oil and gas provinces around the world; competition for skills is truly global,” notes the UK Offshore Continental Shelf Workforce Demographics Report. Indeed, many of the new energy-producing regions are attracting highly-skilled and highly-rewarded expat workers from the UK to plug skills gaps – perhaps explaining the UK’s more persistent skills gap for mid-career roles in both off- and onshore roles, such as design engineering, subsea and drilling engineering, and geosciences.
Vic Okezie, director of Oilgashr.com, says, “From my experience, and following extensive conversations with senior HR leaders in the oil and gas industry, the sector has consistently grappled with talent attraction and retention. It is unique, with very specialised skills and operations in diverse and oftentimes dangerous locations, whilst witnessing the global demand for oil growing at a rate of over 30 per cent between 2010 and 2035.”
 Compensation and benefits
The Hays Oil and Gas Global Salary Guide, a comprehensive study based on 25,000 responses from across the world, gives a great insight into how these trends are translating into hiring trends and the average pay and allowances local and expatriate oil and gas workers can expect.
With demand for certain qualified workers in the sector at an all-time high, the pay and benefits awarded to oil and gas workers are generous – and increasingly so. In 2012, base pay rose 8.5 per cent, following a 6 per cent rise in 2011, bringing average annual base pay (covering both local and expat) up to $87,300.
“Where imported salaries are concerned, it is, once again, the frontiers of the industry that are pushing the upper limits of pay,” says the report. “Representing a mix of danger money and hardship allowance in these base salaries, we find Russia’s Arctic exploration driving imported skills [$151,000], and China’s drive on non-conventional skills also pulling in experts on premium rates [$161,400]. Along with Australia [$171,000], the Caribbean hub for oil and gas, Trinidad & Tobago [$168,800], rounds off the top five importers by salary level.”
Iraq, Nigeria, Thailand and Argentina have also seen rates for expat workers grow above trend, in line with local needs. Salaries have increased across all company types, but contractors and personnel involved in equipment manufacture and supply have seen some of the most significant income growth.
Around 65 per cent of respondents receive bonuses and benefits as part of their compensation. Bonuses are the most common element (42.8 per cent of those surveyed receive them), comprising on average 13.8 per cent of the overall package. Health plans (26 per cent receive them, and there has been a 12 per cent increase in value on last year), home leave allowance/flights (18.2 per cent and 15 per cent), hardship (10.4 per cent and 19 per cent) and housing (19.2 per cent and 9 per cent) have all grown in value, and form the rest of the top five fastest-increasing benefits.
“As with previous years, Asia remains the region in which more allowances and benefits are paid out, as a percentage of the overall package, than any other region,” observes the report. “The Middle East is not far behind, with Africa and South America next.”
 Mobility and HR in partnership
Globally, the percentage of oil and gas workers employed overseas rose to 47.4 per cent, from 42.6 per cent in 2012. Hays is predicting that “with skill shortages as they are, we do not expect it will be long before there are more oil and gas professionals overseas than there are in their own home countries.” AIReS’s 2013 Mobility Trends Survey for the Oil and Gas Industry also observed in the US “a significant up-tick in international long-term assignment activity”.
However, the preference for expats also appears to be tailing off at the margins. One in five respondents stated that they did not employ people on an expat basis, and 8.1 per cent expected levels to fall in the next year as a preference for localisation of some roles takes hold. Further explaining the trends, the AIReS survey also suggests that “short-term assignments continue to be employed for US outbound activity by the oil and gas industry to meet their strategic objectives”.
Today, as well as the perennial cross-sectoral issue of high attrition, the key people challenges are securing people with the right combination of technical skills and personal attributes – including adaptability to ever-more-remote destinations and the ability to communicate well across language and cultural boundaries – and more stringent corporate responsibility and governance codes.
Global immigration specialist Pro-Link GLOBAL is one of the companies working to support the sector as it moves into more diverse and challenging locations. Commenting on the US scene, senior counsel Andrea Elliott said, “The trend appears to be a desire for the oil and gas industries, certainly from an immigration standpoint, to be compliant with regulations. There is much more cohesion between legal, compliance and global mobility overall. The global emphasis on anti-corruption, the UK Bribery Act and the ethiXbase Monitor FCPA Blog publicly outing the transgressors have definitely had a positive impact on the immigration transactions.”
These new complexities have sprung up alongside the opportunities, while the sector is in the spotlight as never before as a potential target for both protestors and terrorists. Getting the right person for the job, and the right package, has never been more important, despite the challenges. Training is therefore also playing a key role, particularly around leadership. But here, too, there are obstacles, especially around delivery. These can range from training venue change due to riots, strikes due to per diem conflicts, different people participating in two-part sessions, and a significant number of medical events, all of which can disrupt key training programmes.
Speaking at a recent Aperian Global webinar, Talent Development for Challenging Locations, John Elsner, general manager of Logistical Solutions International, said, “I would say that every one of these challenges, in principle, is not uncommon, sadly. Probably the biggest area would be having continuity.”
Webinar co-facilitator Anita Zanchettin, director of global talent for Aperian Global, offered delegates valuable insight from recent projects that offer best practice for talent development in challenging locations. These centred on a joint journey with local and expat workers to create culturally appropriate solutions that address both sets of needs.
“It’s hard to do this, and most companies don’t do this, either because of a lack of time, or a lack of money or will,” remarked John Elsner. “But the truth is that the companies that do that have a much better impact, not only on the information they are gaining from the training sessions but also in developing the long-term relationships and accomplishing the long-term goals.”
 Powering ahead
Given the complexities at the forefront of this brave new world, HR and global mobility have a vital role to play in securing the talent pipeline and ensuring that global energy needs are met.
Jolene Paterson, business development manager at Crown Relocations, concludes, “The upswing in the North Sea oilfields and the global increase in 2013 in new emerging markets within South America and Africa means that companies will need more than ever to draw on a professionally managed talent mobility programme collaboration.
“Using talent mobility to develop and retain top-tier talent will help companies to stay one step ahead in an industry which is diversifying so quickly.”

Related Articles